Monday, January 25, 2016

Britain’s estimated £25bn housing benefit bill for 2015-16
is being fuelled by soaring rents in the most prosperous parts of the country
as workers struggle to find affordable accommodation, new research has found.
The report calculates that almost one million jobs have been created in the
UK’s cities since 2010, but average annual wages have dropped by £1,300 per
person, making it more difficult for workers to make ends meet. Around
one-quarter of tenants in private accommodation claim the benefit – and a third
of them are in employment.

Welfare spending is growing rapidly in boom areas of the
South-east of England, largely driven by the growing cost of housing benefit
payments, according to the Centre for Cities think-tank. Spending on housing
benefit in better-off cities such as London, Cambridge, Bournemouth and Milton
Keynes has risen 50 per cent more than in lower-wage cities such as Glasgow and
Liverpool. The average housing benefit claimant now receives £144 a month in
London, £128 in Slough, £118 in Oxford and £117 in Brighton, compared with £72
in Doncaster, £73 in Hull or £75 in Dundee.

Despite the record employment levels, the figures reflect
warnings from some employers in London and the South-east that they are
increasingly struggling to recruit staff because of the exorbitant cost of
rents.

In its annual study of the UK’s 63 largest cities, it found
that all but one of the cities with the highest wages were in the south-east of
England. The exception was Aberdeen. The league table was headed by London,
where the average weekly pay is £675. Seven of the 10 cities with the lowest
pay were in the north of England, with the lowest wage of £399 found in
Huddersfield.

The think-tank’s chief executive, Alexandra Jones, warned of
the danger of their growth being “derailed by a lack of affordable homes”. She
explained “To support the long- term economic growth of these cities, while
also reducing welfare spending, the Government and local authorities need to
take urgent action to tackle housing shortages.” She called for more homes to
be built, for better use of existing property and for improvements to local
transport, adding: “This will make it easier for more people to access jobs and
for businesses to grow.”

George Osborne set out to create a
“higher-wage, lower-welfare economy”. But the Centre for Cities concluded that
half the nation’s cities fall into the opposite category of “low wages, high
welfare”.